Eik fasteignafélag hf. – Valuation as of 1 Jan 2025

Key assumptions

• Rental revenue is expected to grow by 7% in 2025, and thereafter in line with inflation (CPI increase), or 3% per year during the forecast period. The growth for 2025 is based on management projections.
• Operating expenses are assumed to average 36% of operating income per year during the forecast period.
• The revaluation of investment properties corresponds to the increase in the CPI, 4% in 2025 and 3% per year thereafter throughout the forecast period.
• The average cost of interest-bearing debt is estimated at 3.5–4.0% in real (CPI-indexed) terms, equivalent to 6.5–7.5% nominal interest rates during the forecast period. Financing is assumed to be in ISK.
• Income tax is assumed at 20% per year over the forecast period. It is recognized as a tax liability, but no income tax payments are expected due to tax losses carried forward and tax depreciation.
• No investments are assumed in investment properties during the forecast period.
• Dividends are assumed to amount to 52.4% of the previous year’s total comprehensive income in 2025 and 80% from 2026 onwards, assuming an equity ratio of around 33%.
• The terminal growth rate at the end of the forecast period is 3.0%, corresponding to no real growth.
• See other general assumptions under “Valuation.”.

Results

• Based on the above assumptions, the estimated share value is ISK 16.4 as of 1 January 2025.